How one law firm was always destined to be a B Corp
“B Corp” is a buzz word of our time and there’s no doubt everyone is being held to higher standards when it comes to all the facets of how business is conducted. But what does it mean to achieve this sought-after status? Bates Wells’ Nick Misquitta has been there and done it.
🎶 And the [people] who hold high places Must be the ones who start To mould a new reality Closer to the heart. 🎶
These are the opening lines of “Closer to the heart” [1977] by Canadian prog-rockers, Rush. To me, this song could be about B Corps. That people of all professions can play their part in society. Why should it just be down to the third sector to solve societal and environmental problems? With the capability that big business has, why can’t it play its part?
Enter the B Corps.
A B Corp is a business that doesn’t just exist for shareholder (i.e. usually partners in professional services) profit. B Corps have a ‘triple bottom line’ purpose of people, planet and profit.
Why did Bates Wells certify?
Positive impact has been at the heart of Bates Wells for 50 years. We’ve always been immersed in the charity and social enterprise sectors, which make up around 60% of our work. And our advice made sustainable development a recognised charitable purpose in 2003, and we developed the legal concept of the community interest company (CIC) in 2005.
While through charity and public law we have advised on some of the most important public benefit and public interest cases of recent years.
But when other law firms started to describe themselves in terms of positive environmental and social impact, we thought we had to rise above the greenwash. And while advising B Lab UK, the not-for-profit that certifies B Corps in the UK, we realised we had found a ‘home’ amongst other companies that want to be better businesses.
What is the process?
To become a B Corp you have to complete an impact assessment which is audited by B Lab. A company is scored across five key areas of governance, workers, community, environment and customers, and must achieve at least 80 points. We have just completed our third reaccreditation achieving 116.5 points. To put this into context: UK professional services firms average 93.3. A company must also amend its articles of association to include a mission commitment, and there are annual fees to B Lab UK.
How B Corp has changed or cemented what we do?
In a lot of ways things are similar here now – six years later - to how they were before we certified. Although I would say that measuring our impact has given us a roadmap to how we can be a better business. We know the areas that we need to improve. It’s there in black and white on our impact assessment. And we use this as a framework to implement new initiatives that will have a material positive impact on our people, our clients, society and the environment.
“When other law firms started to describe themselves in terms of positive environmental and social impact, we thought we had to rise above the greenwash. And while advising B Lab UK (the not-for-profit that certifies B Corps in the UK), we realised we had found a ‘home’ amongst other companies that want to be better businesses.”
What are the benefits in terms of BD?
Anyone who has worked in professional services marketing knows that market focus is a huge struggle. You take a law firm with 40 partners who each have a few legal specialties and clients across various sectors and industries. So, you have dozens of services to sell and dozens of markets to reach. As a small BDM team, you have to try and tell a coherent story to the world about who you are as a firm, what you’re great at and who you’re great for.
Having a purpose - something more than just profit - has given us that focus. It has given us clarity on our target clients and markets: people and organisations that are creating positive impact.
Another benefit is differentiation. The UK legal industry has hundreds of law firms all providing similar services. Yes, some firms are bigger than others. Some have market-leading lawyers. Some have international offices, and some have regional offices, lower costs and lower fees – but differentiation is difficult.
However, if you can differentiate through a purpose – a why – and you can link that purpose to what you’re providing and who you’re providing it for then you can stand out.
What are the barriers to other professional services firms certifying?
I’m surprised that more professional services firms haven’t certified. I thought that much bigger firms than us would have certified by now. But I do know that there are some big names considering it.
It could be lawyers, accountants, actuaries, etc are all naturally risk-averse. Everyone bangs on about innovation. But really everyone is looking at what their competitors are doing. Innovation is about showing leadership and that means standing out from the crowd, which is what we did when we certified. But it may take one of those big-name firms to draw in the rest of the crowd.
Also, I think it is a lot easier to do this if you can align your initiatives with the services that you’re providing.
For us, our core clients and markets are delivering positive impact, whether they’re charities, social enterprises or mission-driven businesses. But if a big part of your work is helping rich people to minimise their tax liability or helping businesses circumvent workers’ rights then B Corp status probably isn’t for you in the first place.
Is this the direction of travel for business?
It has to be. Even if it’s not driven by the leaders of the business, it will be coming from clients, staff or investors.
70,000 companies have taken the B Impact Assessment (BIA). And 4,000 have certified. That’s around five per-cent. Many of the 95% are using the BIA to measure their impact and to see how they can improve as a business. That might be as far as they ever want to go.
For very big businesses – with subsidiaries and offices across different countries - certification will be a longer and more difficult process. But it can be done and there are big businesses that are examples of this.
For very small businesses the policies, processes and evidential data that you have to provide might be putting them off.
We’re trying to provide more guidance to prospective B Corps on the legal and the non-legal aspects of the certification to make it easier for them to get over the line.